As Tom and Jay mourn the death of cultural icon Stan Lee, they consider that story and look at some of the week’s top compliance and ethics stories.

  1. Why Goldman’s ‘tick the box’ compliance program not good enough. FT editorial board. (sub req’d) What are 4 questions the DOJ is likely to ask and what are 4 areas of inquiry under the FCPA Corporate Enforcement. Tom explores in Part I and Part II. Mike Volkov asks ‘what about respondent superior’?; in his blog Crime, Corruption and Compliance. Richard Bistrong explained what happened during his guilty plea hearing for his FCPA criminal action, in the FCPA Blog.
  2. How can ISO 37001 be fixed? Joe Murphy lists 44 ways on the FCPA Blog.
  3. MoneyGram spanked again as it’s DPA is extended. John Rausch reports in his Dipping Through Geomotries
  4. Tesla names new Board Chair. Will she be able to rein in Elon Musk? Tom Krisher reports in the Washington Post.
  5. Has your company assess the impact of Brexit? If not, the SEC says you should do so. Tatyana Shumsky reports in the WSJ Risk & Compliance Journal.
  6. Why 2019 may well be a challenging year for internal audit. Rafael Go and Leslee McKnight write in Corporate Compliance Insights.
  7. Are companies meeting their human rights requirements? Sam Rubenfeld explores in WSJ Risk & Compliance Journal.
  8. What is the business impact of bribery and corruption in Venezuela? Chevron weighs pulling out. Kejal Vyas and Bradley Olson report in the WSJ.
  9. Chuck Duross says cutting back on compliance programs would be both short-sighted and foolish. Adam Dobrik reports in GIR.
  10. How has GDPR impacted M&A deals? Nina Trentmann reports in the WSJ Risk & Compliance Journal.
  11. In a sponsored podcast, Tom visits with Vin DiCianni and Eric Feldman of Affiliated Monitors on the impact of culture, compliance and monitoring for non-US companies in countries outside the US. Part I-Introduction, Part II-International Enforcement Trends, Part III-Spain, Part IV-Development of Monnitoring in International Enforcement and Part V-International Challenges for Monitors.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

In this podcast series, I visit with Vin DiCianni, founder and President of Affiliated Monitors, Inc. (AMI) and Eric Feldman, Senior Vice President of AMI. We consider the global view of ethics, compliance and corporate culture of non-US companies, outside the US; in both their home countries and in other countries and has a long history of working with internationally based companies. AMI does independent integrity monitoring in multiple countries outside the US and for many non-US organizations. It is therefore well positioned to observe some of the challenges for monitors working internationally. In this concluding Part V, I discuss some of the challenges for monitors in the international arena with Feldman.

Feldman noted that while the word ‘monitor’ can sometimes drive fear into the heart of a non-US company, this not need be the case. Feldman said that the AMI is collaborative in nature. The approach the company takes is, “about improving, remediating the company, not going after them with a baseball bat, not attempting to continue the investigation of the problems that led to the settlement and the agreement in the first place. That proactive mindset that we have is geared towards identifying what works within a company, taking into account the culture of the company and the culture of the country that the company is located in and how we come up with recommendations to strengthen the ethics and compliance program and the culture.”

It is about the demonstration of value to the company retaining the monitor. Feldman posed the question, “What is the value of an independent third party coming from the outside of your company and assessing the extent to which you’ve done due diligence to prevent fraud, waste, abuse, mismanagement and corruption and due diligence?” He further noted, it is also about “ensuring that your ethics and compliance activities actually are working and are having an impact on the workforce.”

There is an ongoing evolution by many non-US companies, literally around the world, regarding compliance. They are responding to increased enforcement activity and action by not just the United States but by their own countries. This has led to the same requirement to have an independent third party come in to let them know where they stand, to let them know what is and is not working for their own internal corporate cultures.

One of the things about monitors and monitoring outside the US is the different types of judicial approaches prosecutors might invoke. For instance the UK model of Deferred Prosecution Agreements (DPAs) has much greater judicial involvement and presumably ongoing oversight. This could well lead to differences in monitoring from the US approach. Feldman noted, “a big part of monitoring process, whether it’s proactive or reactive, is to take into account the different cultures of the countries where the companies operating.” He cited to the example of a whistleblower hotline and a speak up culture, stating, “when you’re looking at employee reporting in some countries it’s not part of the culture and it’s seen as a lack of respect for employees to speak up and tell their supervisors that they’re wrong or to question what a supervisor or manager is doing, it’s seen as a lack of respect. So in order to encourage a speak up culture in a country which is not a speak up country, you have to devise other methods of extracting employees, opinions and views and making them feel comfortable to raise issues and ask questions.”

This is the type of issue that requires an independent monitor to “have some people on the ground working with you and with a really good understanding of the culture in that country and how it impacts how the employees view their roles in each individual company.” A monitor must consider the methodology and approach. While monitor expertise is always critical, it must be tempered with “an eye toward ensuring that the local culture.”

Feldman concluded that it comes down to dialogue with the multiple stakeholders and parties involved. From the regulators and the judiciary, it may be a discussion around the form of the penalty and its resolution. With the sanctioned company, it could be around its goals for a more robust compliance program going forward and completion of whatever ongoing term a judge may apply. Having this conversation around expectations, where there is very clearly a public interest involved, what is in the public’s interest in terms of settling the case corruption with the company and focusing on remediating what led to the problem in the first place is most critical.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

NOVEMBER 16, 2018 BY TOM FOX

In today’s edition of Daily Compliance News:

In this podcast series, I visit with Vin DiCianni, founder and President of Affiliated Monitors, Inc. (AMI) and Eric Feldman, Senior Vice President of AMI. We consider the global view of ethics, compliance and corporate culture of non-US companies, outside the US; in both their home countries and in other countries where. AMI does independent integrity monitoring in multiple countries outside the US and for many non-US organizations. This work has given them a unique vantage point to observe developments. In this Part IV, I discuss the changing face of monitors in the international arena with DiCianni.

Monitoring in the international arena is not as prevalent as it is in the domestic US context. This ties somewhat to the maturity of international anti-corruption enforcement. This is something we have certainly seen an increase in over the past couple of years beginning under the Obama Administration and continuing under the Trump Administration. This will most probably portend to an increase in monitors and monitoring outside the US. Certainly, such a concept is not foreign to countries outside the US, as there was a monitor involved with Siemens AG around its 2008 Foreign Corrupt Practices Act (FCPA) resolution.

DiCianni admitted that he has been described as a missionary around independent integrity monitoring. (As the Compliance Evangelist, I get that.) However, DiCianni evangelizes “about independent monitoring and how it could be an effective resource for government agencies just as it has been in the US.” He did admit that while foreign jurisdictions are understanding the benefits of an independent integrity monitor from a conceptual basis, “it is a mindset and it’s a change that I don’t know that they’re quite ready for yet.” Interestingly, one reason is the difference in judicial approach, particularly from countries which are code based as opposed to common law based. In the code-based countries there is a mindset to hold a company criminally liable and not to work a settlement resolution to remedy the underlying factors which led to the legal violation.

One of the reasons I find independent integrity monitoring so powerful is that it brings a sense of both institutional justice and fairness into the workplace and with the now increased scrutiny around corporate culture and whether a company is basically fair to its employees. I asked DiCianni if that that is a message that resonates outside of the United States in Europe? He believes it is “getting there”.

One impediment can be that sometimes the problem is both “deeper and it is cultural.” As an independent integrity monitor, you are “coming in and helping sort of assess the culture and strengthen the culture, assess the strength of a compliance and ethics program and controls”. But the role can also be as a mentor, and DiCianni is seeing “a real interest, to move in that direction. At the end of the day we are looking at whether or not the program is strong and whether or not the culture was strong. I think that some government agencies outside the US, think is their role and they are not ready and willing to outsource that role.”

One of the things that I am always sensitive to outside the US is the ugly American syndrome and/or does it simply look like American imperialism to say only Americans can be independent integrity monitors. DiCianni replied that while one should always be sensitive to that issue, many compliance practitioners rightly look to the US for leadership in this profession. Through both the enforcement regimes of the Department of Justice (DOJ) around the FCPA and the maturity of the compliance profession in the US, American leadership is well-known and appreciated in this area. Another key component is to use established professionals from the country to help any US based independent integrity monitor.

Tomorrow we conclude with international challenges for monitors.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

 

NOVEMBER 15, 2018 BY TOM FOX

In today’s edition of Daily Compliance News:

  • How has GDPR impacted M&A deals? (Wall Street Journal)
  • AstroBall nominated as one of the best business books of 2018.(Amazon)
  • What is a public spanking? Goldman Sachs finds out as the FT Editorial Page calls out its check the box compliance mentality. (Financial Times)
  • Why cutting back on compliance programs would be short-sighted and foolish. (GIR)